Leveraged bubbles

Oscar Jorda, Moritz Schularick and Alan Taylor

No 2015-10, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: What risks do asset price bubbles pose for the economy? This paper studies bubbles in housing and equity markets in 17 countries over the past 140 years. History shows that not all bubbles are alike. Some have enormous costs for the economy, while others blow over. We demonstrate that what makes some bubbles more dangerous than others is credit. When fueled by credit booms,asset price bubbles increase financial crisis risks; upon collapse they tend to be followed by deeper recessions and slower recoveries. Credit-financed housing price bubbles have emerged as a particularly dangerous phenomenon.

JEL-codes: C14 C32 E44 E51 G01 N10 N20 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2015-08-01
Note: First draft November 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

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Related works:
Journal Article: Leveraged bubbles (2015)
Working Paper: Leveraged Bubbles (2015)
Working Paper: Leveraged Bubbles (2015)
Working Paper: Leveraged Bubbles (2015)
Working Paper: Leveraged Bubbles (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:2015-10

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DOI: 10.24148/wp2015-10

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